Not A Member Yet? See All The Features Of The Forum By Clicking Here To Register For FREE! Or Members Login Below:

Cyprus Eastern Forum Index Cyprus Eastern Forum Index
Offering Free Help, Advice, Tips & Support for those buying or living in:
Paralimni - Protaras - Pernera - Kapparis - Agia Napa - Larnaca - Oroklini - Pervolia - Kiti - Xylofagou
Vrysoulles - Frenaros - Dherynia - Sotira - Agia Thekla - Liopetri - Ormidia & surrounding areas...

 
Main Homepage Cyprus Eastern Forum Index Register Directory Memberlist Search

  Ads By Forum Sponsors

    
Cyprus Eastern Forum Index » Coffee Shop Chat » The psychology of property prices Goto page 1, 2, 3  Next
Post new topic  Reply to topic   View previous topic : View next topic 
The psychology of property prices 
Post: #1   PostPosted: Mon May 28, 2012 7:21 am Reply with quote
Denise55
Joined: 21 Mar 2011
Posts: 449
Pictures: 0

 
Something to think about.

Why do we feel that property prices rising are a good thing?

Who does it benefit?

If you fill your car with petrol and it costs you 70 today then goes up and tomorrow it will cost you 100 do you feel richer because your asset is worth more? Would you feel poorer if it went down to 50?

In general the person buying a property never benefits from rising property prices. He has to live somewhere so if he sells one for more then he necessarily has to pay more for his next home.

A lot of people in Cyprus think the market would be transformed if the government suddenly issued all the outstanding deeds. Whilst it is undeniable that people would feel more secure in their homes and would be free to extend them etc, it is my opinion that prices would continue to fall for reasons quite outside the title deeds fiasco.

Isn't it time we stopped thinking about property as an investment but as what it should be, a home?
Personal Photo Album View user's profile Cyprus News,Weather & Travel


Hide These Ads? Register for Free or Login

Re: The psychology of property prices 
Post: #2   PostPosted: Mon May 28, 2012 7:31 am Reply with quote
geoffreys
Membership Closed
Joined: 29 Oct 2010
Posts: 7434
Pictures: 1
Location: Agios Georgios Acheritou Refugee Camp.

 
Denise55 wrote:
Something to think about.

Why do we feel that property prices rising are a good thing?

Who does it benefit?

If you fill your car with petrol and it costs you 70 today then goes up and tomorrow it will cost you 100 do you feel richer because your asset is worth more? Would you feel poorer if it went down to 50?

In general the person buying a property never benefits from rising property prices. He has to live somewhere so if he sells one for more then he necessarily has to pay more for his next home.

A lot of people in Cyprus think the market would be transformed if the government suddenly issued all the outstanding deeds. Whilst it is undeniable that people would feel more secure in their homes and would be free to extend them etc, it is my opinion that prices would continue to fall for reasons quite outside the title deeds fiasco.

Isn't it time we stopped thinking about property as an investment but as what it should be, a home?


Even if you are right that if the Title Deeds fiasco was resolved property prices would/might still continue to fall - the fact is the issue of such a backlog of Deeds would more or less sort out the Govt's cashflow problems and avoid an EU bailout as they would receive millions in transfer fees. That would be good news for everyone since an EU Bailout would result in increased taxes etc.
Geoff
Personal Photo Album View user's profile Cyprus News,Weather & Travel
 
Post: #3   PostPosted: Mon May 28, 2012 9:04 am Reply with quote
Denise55
Joined: 21 Mar 2011
Posts: 449
Pictures: 0

 
Oh I don't dispute that at all and it is ludicrous the amount the government is throwing away because each time a property changes hands without deeds they lose out on a set of transfer fees.

However, the thread wasn't really meant to be about deeds or even particularly Cyprus. It is about the train of thought that property prices rising is ever a good thing.
Personal Photo Album View user's profile Cyprus News,Weather & Travel
 
Post: #4   PostPosted: Mon May 28, 2012 9:15 am Reply with quote
zero
Joined: 18 May 2012
Posts: 63
Pictures: 0
Location: All Around the World

 
IMHO prices need to drop another 30% to be priced realistically in Cyprus.Then they can slowly grow over the next 6 to 10 years while the rest of the world economy is getting back to normal.

_________________
GIVE ME A PLACE TO STAND AND I WILL MOVE THE EARTH
Personal Photo Album View user's profile Cyprus News,Weather & Travel
 
Post: #5   PostPosted: Mon May 28, 2012 9:36 am Reply with quote
geoffreys
Membership Closed
Joined: 29 Oct 2010
Posts: 7434
Pictures: 1
Location: Agios Georgios Acheritou Refugee Camp.

 
Denise55 wrote:
Oh I don't dispute that at all and it is ludicrous the amount the government is throwing away because each time a property changes hands without deeds they lose out on a set of transfer fees.

However, the thread wasn't really meant to be about deeds or even particularly Cyprus. It is about the train of thought that property prices rising is ever a good thing.


Sorry if I digressed to much, but they are inter-related.
If property prices increase it increases demand and the construction industry booms, the economy booms, jobs galore, etc.
Always provided there are no toxic loans involved of course!
So it seems to me to be a positive thing.
Some however argue that lower prices make house purchase for the 1st time buyer affordable. True, but then the cycle starts againas a result.
Geoff
Personal Photo Album View user's profile Cyprus News,Weather & Travel
 
Post: #6   PostPosted: Mon May 28, 2012 9:57 am Reply with quote
scottie
Joined: 01 Feb 2012
Posts: 7474
Pictures: 0
Location: kapparis

 
Common sense there Geoff. That is probably why all countries use house prices as a main indicator to the state of a countries economy
Personal Photo Album View user's profile Cyprus News,Weather & Travel
 
Post: #7   PostPosted: Mon May 28, 2012 10:04 am Reply with quote
Denise55
Joined: 21 Mar 2011
Posts: 449
Pictures: 0

 
Rolling Eyes
Personal Photo Album View user's profile Cyprus News,Weather & Travel
 
Post: #8   PostPosted: Mon May 28, 2012 10:09 am Reply with quote
scottie
Joined: 01 Feb 2012
Posts: 7474
Pictures: 0
Location: kapparis

 
You do have lovely eyes
Personal Photo Album View user's profile Cyprus News,Weather & Travel


Hide These Ads? Register for Free or Login

 
Post: #9   PostPosted: Mon May 28, 2012 10:09 am Reply with quote
Denise55
Joined: 21 Mar 2011
Posts: 449
Pictures: 0

 
geoffreys wrote:
Denise55 wrote:
Oh I don't dispute that at all and it is ludicrous the amount the government is throwing away because each time a property changes hands without deeds they lose out on a set of transfer fees.

However, the thread wasn't really meant to be about deeds or even particularly Cyprus. It is about the train of thought that property prices rising is ever a good thing.


Sorry if I digressed to much, but they are inter-related.
If property prices increase it increases demand and the construction industry booms, the economy booms, jobs galore, etc.
Always provided there are no toxic loans involved of course!
So it seems to me to be a positive thing.
Some however argue that lower prices make house purchase for the 1st time buyer affordable. True, but then the cycle starts againas a result.
Geoff


I think you've got your economics the wrong way round there Geoff. Increase in demand leads to house price increases. That necessarily increases demand for higher wages which leads to higher prices for all other commodities.

As to construction, talking of Cyprus now, there has been a massive over supply of property way exceeding demand. That is one of the reasons for the falls amongst others.
Personal Photo Album View user's profile Cyprus News,Weather & Travel
Re: The psychology of property prices 
Post: #10   PostPosted: Mon May 28, 2012 10:24 am Reply with quote
Tina Torment
Joined: 30 Aug 2005
Posts: 3546
Pictures: 0

 
Denise55 wrote:
If you fill your car with petrol and it costs you 70 today then goes up and tomorrow it will cost you 100 do you feel richer because your asset is worth more? Would you feel poorer if it went down to 50?


An asset to who lol! To the damn garage more like.... Evil or Very Mad

Denise55 wrote:
In general the person buying a property never benefits from rising property prices. He has to live somewhere so if he sells one for more then he necessarily has to pay more for his next home?


Buyers do not benefit from rising prices, sellers do. Cool Having worked for several years in estate agents, I found that people sell for all sorts of different reasons & buyers purchase not necessarily for investment.

During the UK housing 'boom' years, many home owners (especially in the south) made a killing by selling on their inner city property, down sizing, moving to rural areas or even abroad. They didn't necessarily have to purchase another home either, they could invest at a good interest rate & rent out of the interest made. Those days are gone! Sad
Personal Photo Album View user's profile Send e-mail Cyprus News,Weather & Travel
 
Post: #11   PostPosted: Mon May 28, 2012 10:35 am Reply with quote
Denise55
Joined: 21 Mar 2011
Posts: 449
Pictures: 0

 
I wouldn't disagree with that at all Tina but that is only a small minority of the overall market, and as you say, a thing of the past. Making a killing could be a very good phrase in this context because selling to someone at the peak of the market could mean killing off the quality of the person buying in that they have to work themselves to death to pay for it.

However, by far the greater majority of people buy a house to live in. In the UK we have had an ownership fetish for some 40-50 years. Prior to that it was not possible for the average working man and even then not possible for many. Some other countries with strong economies have always seen renting as a much more preferable option. I take the point I've seen you make elsewhere that renting a property does not make it like home but isn't that a state of mind? I've certainly come to realise that renting offers you a flexibility that ownership never can. At the moment I'm somewhere in the middle of thinking which is best.
Personal Photo Album View user's profile Cyprus News,Weather & Travel
 
Post: #12   PostPosted: Mon May 28, 2012 10:38 am Reply with quote
Denise55
Joined: 21 Mar 2011
Posts: 449
Pictures: 0

 
scottie wrote:
Common sense there Geoff. That is probably why all countries use house prices as a main indicator to the state of a countries economy


Would you like to name one country, never mind all the countries, that use house prices rather than GDP and other economic factors to indicate the state of the economy?
Personal Photo Album View user's profile Cyprus News,Weather & Travel
 
Post: #13   PostPosted: Mon May 28, 2012 10:39 am Reply with quote
Tangutica
Joined: 11 Jul 2008
Posts: 11936
Pictures: 26

 
If by a 'fall' in property prices you mean that someone cannot now get what they paid for their property a year or more ago - I understand they see that as a 'fall'. In that case property prices have DROPPED since they bought. Isn't that simple in Cyprus - most I know who grumble about 'falling property prices' bought off plan for a song and are complaining that they cannot now get 120K for an apartment they bought off plan a few years ago for less than 50K! And in some cases less than that.

I know very few who bought at the peak and most of them react in a shell shocked manner when they hear what others bought similar in the area for a few years previously. Even so, certainly for apartments, they could sell them if they were prepared to sell for around what they paid. Alas too few are prepared to do that. They were told it was a good investment, couldn't fail to make money, and against all the odds they are hanging onto that belief. Banks aren't helping - they want inflated property prices if they are using them as collateral for loans they've shelled out.

I live in a huge block. Some paid just 25K for one bed apartments here off plan - others paid 40K for the same apartments (bought from a different estate agent) then, unbelievably, just after finished built - some paid 80K for same thing! Some paid 40K for 2beds and others paid 80K for the same 2beds slightly further down the line. The ones who paid more are, naturally GUTTED when they find out what others paid. But you end up with a situation where one is prepared to sell a 1bed for 50K (still making a nice profit) and another owner of a similar apartment is screaming that they cannot 'afford' to sell for less than they paid, even if that amount is twice what someone else paid for theirs and is happy with.

If you can see what I am getting at here! There are 3 apartments owned by same person on my floor - a 2bed and 2 1beds - they paid a grand total of 85 Sterling for all three off plan. There is another, next door to them, which cost the owners more than these three put together!

There are about 4 owners who bought 3, 4 or even 5 properties in the same building here. Seems to be that the more you bought, the cheaper you got them! A REALISTIC Cypriot owner told me that if he just sold one of the larger ones he owns - he would have covered what he paid off plan for all 4 of his. And that would be selling it at a realistic price. We've got 1beds for sale here at the mo for 135K lol! And 2beds for 180K! Of course there is no interest in them whatsoever but it does provide a bit of amusement for some living here.

So - increasing or decreasing. Increasing from what? From what was PAID or from what was said it was 'going to be worth' or what some changed hands for at the very peak?

I sold my house in the UK 6 yrs ago. It was recently sold again by the lady who bought it from me. She sold it for 35K less than she paid me for it. I call THAT a DROP in prices. I sold it cheaply for a very quick cash buyer sale and a buyer who would play ball with when I wanted to move out. I sold it within days of putting it on the market. She's had it up for sale for a year or more and cannot get what she paid for it.


Last edited by Tangutica on Mon May 28, 2012 10:50 am; edited 1 time in total
Personal Photo Album View user's profile Cyprus News,Weather & Travel
 
Post: #14   PostPosted: Mon May 28, 2012 10:45 am Reply with quote
geoffreys
Membership Closed
Joined: 29 Oct 2010
Posts: 7434
Pictures: 1
Location: Agios Georgios Acheritou Refugee Camp.

 
Denise55 wrote:
geoffreys wrote:
Denise55 wrote:
Oh I don't dispute that at all and it is ludicrous the amount the government is throwing away because each time a property changes hands without deeds they lose out on a set of transfer fees.

However, the thread wasn't really meant to be about deeds or even particularly Cyprus. It is about the train of thought that property prices rising is ever a good thing.


Sorry if I digressed to much, but they are inter-related.
If property prices increase it increases demand and the construction industry booms, the economy booms, jobs galore, etc.
Always provided there are no toxic loans involved of course!
So it seems to me to be a positive thing.
Some however argue that lower prices make house purchase for the 1st time buyer affordable. True, but then the cycle starts againas a result.
Geoff


I think you've got your economics the wrong way round there Geoff. Increase in demand leads to house price increases. That necessarily increases demand for higher wages which leads to higher prices for all other commodities.

As to construction, talking of Cyprus now, there has been a massive over supply of property way exceeding demand. That is one of the reasons for the falls amongst others.


Chicken and egg Denise. Increased demand causes increases in price, and vice versa, Cyclic.
What made prices drop worldwide was the credit crunch.
In Cyprus that was made worse by the Title Deeds fiasco, in Spain by the Land Grab, in Greece the failing economy.
Geoff
Personal Photo Album View user's profile Cyprus News,Weather & Travel
 
Post: #15   PostPosted: Mon May 28, 2012 10:53 am Reply with quote
Denise55
Joined: 21 Mar 2011
Posts: 449
Pictures: 0

 
It depends when you are talking about Tang. In general prices in Cyprus are now at the same level as off plan prices in 2003. Anyone buying after that are very likely in negative equity.
Personal Photo Album View user's profile Cyprus News,Weather & Travel



Join Us Today! Register for Free or Login

 
Post: #16   PostPosted: Mon May 28, 2012 10:57 am Reply with quote
Denise55
Joined: 21 Mar 2011
Posts: 449
Pictures: 0

 
Sorry Geoff you are wrong. It is not vice versa. Increases in prices MAY, in the short term only, lead to an increase in demand, but there comes a point when it is entirely unsustainable and that is where the economy has been for the last few years.

Only time will tell of course but the fact is that prices in Cyprus are still falling.
Personal Photo Album View user's profile Cyprus News,Weather & Travel
 
Post: #17   PostPosted: Mon May 28, 2012 10:57 am Reply with quote
Tangutica
Joined: 11 Jul 2008
Posts: 11936
Pictures: 26

 
Denise55 wrote:
scottie wrote:
Common sense there Geoff. That is probably why all countries use house prices as a main indicator to the state of a countries economy


Would you like to name one country, never mind all the countries, that use house prices rather than GDP and other economic factors to indicate the state of the economy?


Not going to name countries doing what you say but it has been said for many years, that the UK Economy has been too closely tied to the Property Market there.
Personal Photo Album View user's profile Cyprus News,Weather & Travel
 
Post: #18   PostPosted: Mon May 28, 2012 11:00 am Reply with quote
Denise55
Joined: 21 Mar 2011
Posts: 449
Pictures: 0

 
Said by who though Tang? It may be that people personally perceive their own economic situation by the price of their property but it is certainly not what makes the wheels of commerce turn.
Personal Photo Album View user's profile Cyprus News,Weather & Travel
 
Post: #19   PostPosted: Mon May 28, 2012 11:13 am Reply with quote
chris
Joined: 10 May 2006
Posts: 515
Pictures: 1
Location: North London

 
During the 'boom years' (2004 - 2007?) the developers who built our house did very well, so well in fact that they spent their profits on new double cab trucks, new cars, and building houses for their children. Very Happy

Had they known what was coming, they would have been wiser to have put their profits in the bank, because now their company is no longer trading and the only work they have is as 'jobbing' builders working for other developers.

As to current house prices, despite the fact we purchased in 2004-05, we will need to wait for the housing market to recover before the value of house will equal what we paid out for it. Mad

Chris

_________________
The greatest adventure you can have is to live the life of your dreams.
Personal Photo Album View user's profile Send e-mail Cyprus News,Weather & Travel
 
Post: #20   PostPosted: Mon May 28, 2012 11:15 am Reply with quote
geoffreys
Membership Closed
Joined: 29 Oct 2010
Posts: 7434
Pictures: 1
Location: Agios Georgios Acheritou Refugee Camp.

 
Denise55 wrote:
Sorry Geoff you are wrong. It is not vice versa. Increases in prices MAY, in the short term only, lead to an increase in demand, but there comes a point when it is entirely unsustainable and that is where the economy has been for the last few years.

Only time will tell of course but the fact is that prices in Cyprus are still falling.


Yes and no. I DID say the thing was cyclic, and it gets thrown off normal course by other factors, I mentioned some in Cyprus, Spain, Greece.
And YES, prices in Cyprus are still falling, and I don't think that will change until people from outside the Island feel confident once again to buy here.
They would feel a bit more confident if they knew they get the title deeds as soon as they complete their purchase. Just like in UK for example.
Believe me when I say Buyers are more fickle than Politicians these days.
If falling prices are a good thing how come no one is buying??
Geoff
Personal Photo Album View user's profile Cyprus News,Weather & Travel
The psychology of property prices 
  Cyprus Eastern Forum Index » Coffee Shop Chat
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
  


All times are GMT  
Page 1 of 3  
Goto page 1, 2, 3  Next


  
  
 Post new topic  Reply to topic   
Search Tags: #psychology #property #prices



 Facebook Page    Facebook Group    Our Channel    Cyprus eBay Search    Shopping To Cyprus    Contact Admin   SmartFeed RSS Feed



BUYING PROPERTY IN CYPRUS? PLEASE ENSURE THAT YOU SEEK INDEPENDENT LEGAL ADVICE FIRST.
Cyprus forum covering Kapparis, Protaras, Pernera, Agia Napa, Agia Thekla, Paralimni, Larnaca, Oroklini, Pervolia & surrounding areas
Please note that the views expressed on this forum are those of the author and may not reflect the views of the management.
* Problems Logging In? Click To Contact Us | Powered by phpBB © phpBB Group Design Style: VTrushkin | View Lo-Fi Version